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February 25, 2021 By cs

New final rule limits use of LPTA

Businesses and consumers make complex trade-off decisions every day when buying and selling supplies and services.

Sometimes it makes sense to pay more or charge more for a supply or service when quality improvements, added features, or other considerations justify the price.  Other times, paying more or adding features provides no meaningful benefit so we opt for the least expensive item that satisfies our needs.

The federal government uses this same framework, dubbed the “best value continuum,” in negotiated acquisitions.  On one end of this continuum is a full trade-off, where non-price factors, e.g., quality and past performance, take precedence over price.  On the opposite end of the continuum is the lowest price technically acceptable (LPTA) process.  Under LPTA, the government determines its minimum acceptable technical requirements and then seeks to award a contract to the lowest priced offeror who meets the minimum requirements.

Federal agencies have been criticized for overusing the LPTA source selection process, based on the concerns that LPTA procedures chill innovation and hamstring agencies who could benefit from trading cost or price considerations for technically superior capabilities. The business community also criticized government reliance on LPTA to purchase safety-related items; such items should not be purchased based on minimum standards.

In response to these criticisms, Congress included Section 880 in the Fiscal Year (FY) 19 National Defense Authorization Act (NDAA), stating: “[i]t shall be the policy of the United States Government to avoid using lowest price technically acceptable source selection criteria in circumstances that would deny the government the benefits of cost and technical tradeoffs in the source selection process.”

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1034008/you-get-what-you-pay-for-new-final-rule-limits-use-of-lpta

See Jan. 14, 2021 Final Rule affecting LPTA at: https://www.govinfo.gov/content/pkg/FR-2021-01-14/pdf/2020-29087.pdf

Filed Under: Uncategorized Tagged With: best value, best value continuum, FAR, FAR Council, final rule, lowest price, lowest price technically acceptable, LPTA, NDAA, negotiated price, past performance, quality, service contracts, source selection, technical requirements, trade off, tradeoff, value

January 17, 2019 By AMK

DoD’s long-awaited LPTA regulations expected in 4th quarter of FY19

For a number of years now, Lowest Price Technically Acceptable (LPTA) source-selection procedures have come under fire for overuse and misuse at the same time budget constraints make LPTA methods more enticing to some cash-strapped agencies.

In an LPTA procurement, the Government evaluates proposals for mere technical acceptability under the solicitation’s stated evaluation criteria. Of the technically acceptable proposals received from eligible offerors, the Government then awards the contract to the lowest-price proposal, without considering any additional value that more expensive proposals may provide. In an LPTA acquisition, it does not matter that the second least expensive proposal may have three times more technical merit than the lowest-price technically acceptable proposal. Even if that technically superior proposal is only a dime more expensive, the Government is required to make the award to the acceptable proposal that is ten cents cheaper.

Some of you may remember that, way back in 2016, Congress passed the National Defense Authorization Act (NDAA) for 2017, requiring the Department of Defense (DoD) to revise the Defense Federal Acquisition Regulation Supplement (DFARS) within 120 days to require DoD contracting officers to ensure six criteria are satisfied before issuing a solicitation on an LPTA basis.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=767110

Filed Under: Government Contracting News Tagged With: DFARS, DoD, lowest price, LPTA, NDAA, source selection, technical evaluation

January 26, 2017 By AMK

GAO ruling lets GSA buy the USDA steak, not the mystery meat

The General Services Administration (GSA) may have just put the first nail in the coffin that eventually will bury the widespread use of lowest-price, technically acceptable (LPTA) contracts for services.

The Government Accountability Office’s decision to deny four protests of GSA’s Alliant 2 contracts for IT services could end up being a landmark ruling that is that first nail.

“Lowest-price technically acceptable has been disfavored among contractors for putting price over innovation. Now we have protesters who in essence claim that cost was only nominally and improperly considered in the Alliant 2 evaluation,” said Barbara Kinosky, managing partner of Centre Law & Consulting LLC. “We have seen DoD move away from LPTA. This is the first major requirement coming out of a civilian agency that is clearly saying, ‘Contractors, we are looking for smart over cheap. Give us the USDA steak, not the convenience store mystery meat.’ I am confident this is a trend we will now see more of since GSA has taken the lead in the technology area where we definitely need to excel.”

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2017/01/gao-ruling-lets-gsa-buy-usda-steak-not-mystery-meat/

Filed Under: Government Contracting News Tagged With: Alliant, bid protest, DoD, evaluation criteria, fair and reasonable, GAO, GSA, low bid, lowest cost technically acceptable, lowest price, LPTA, proposal evaluation, quality

February 23, 2016 By AMK

New acquisition tool allows agencies to comparison shop

Contractors and interested members of the public may now use the online Acquisition Gateway to view a slice of agency procurement data, the General Services Administration has announced.

Category Management video snipThe new tool advances the Obama Administration’s push, launched in December 2014, to remove procurement duplication across government through category management.

Agencies are encouraged to “act as one” and use the Acquisition Gateway to find side-by-side comparisons of different agency solutions for common procurement challenges such as cloud computing and logistics. The idea is to let agency purchasers connect with like-minded professionals and explore the 10 “hallways” of products and services.

The gateway offers category-related articles produced by federal employees, templates, market-research tools, and prices-paid data organized along the steps of the acquisition life cycle. Opening it to the public was done in the “spirit of data transparency,” GSA said.

Keep reading this article at: http://m.govexec.com/contracting/2016/02/new-acquisition-tool-allows-agencies-comparison-shop/125731/

Filed Under: Government Contracting News Tagged With: Acquisition Gateway, category management, GSA, lowest price

February 22, 2016 By AMK

Is lowest-price-technically-acceptable on the decline?

Lowest-price, technically acceptable (LPTA) contracts aren’t going away – but data does suggest Federal agencies are cutting back on the practice.

LPTA deals took the market by storm as the government slashed budgets in the wake of the Great Recession. When the Pentagon unveiled its Better Buying Power initiative in 2009, the government signed about 4.2 million LPTA contracts, or 2.4 percent of Federal procurements. Three years later, the number of LPTA contracts had ballooned to 7.5 million, or 4.4 percent, according to an August 2015 study by Deltek Inc. of Herndon, Va.

Now LPTA appears to be in decline. According to Deltek’s analysis, LPTA utilization peaked in 2012 and declined the next two years running, a total drop of 24 percent from the 2012 peak. 2015 data has not been compiled.

LPTA Procurements - FY09-14

Keep reading this article at: https://www.govtechworks.com/are-feds-retrenching-on-lowest-price-contracts-maybe

Filed Under: Government Contracting News Tagged With: best value, Better Buying Power, DAU, DoD, lowest cost technically acceptable, lowest price, lowest price technically acceptable, LPTA, source selection

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